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If an Initial Increase in Government Spending of $100 Billion

Question 101

Multiple Choice

If an initial increase in government spending of $100 billion leads to a total increase of $400 billion in income,the marginal propensity to consume in the economy is


A) 0.4.
B) -0.8.
C) 0.5.
D) 0.75.
E) 0.8.

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